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Case 20— Southwest Airlines in 2010: Culture, Values, and Operating Practices Southwest Airlines has become the market-share leader in domestic...

Question:

Case 20— Southwest Airlines in 2010: Culture, Values, and Operating Practices

Southwest Airlines has become the market-share leader in domestic air travel in the United States. This quirky but scrappy airline started small and now transports more passengers from U.S. airports to U.S. destinations than any other airline. Their market symbol is (LUV). They’ve emphasized a low cost, low price, and no frills strategy that has worked well for them. In May 2011, Southwest acquired AirTran Holdings, Inc., the parent of AirTran Airways. This was a major acquisition for Southwest and presents some management challenges for its continuing success. Is it possible that Southwest will continue to achieve the success to which it’s accustomed while integrating AirTran into its organization?

PROCEDURE

Read through Case 20—Southwest Airlines in 2010: Culture, Values, and Operating Practices

Carefully go through all chapters covered in your course and analyze the Southwest Airlines case within the frameworks available. In addition to the case material in the textbook, review the video for Case 20 available on the My Courses page of your student homepage. Because this situation is fluid, there’s no correct or incorrect answer; what’s important is your application of course materials and the process of your analysis. Begin with a SWOT analysis, in which strengths include the firm’s market share and weaknesses include the firm’s cost trends. Feel free to review the many business articles on Southwest, the stock chat message boards (forsentiment), and any source of information you feel is helpful. Remember to provide citations for any material from which you quote verbatim.

Your paper should provide answers to the following questions:

  1. Is there anything that you find particularly impressive about Southwest Airlines? Provide at least four examples.
  2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the strategy? Does Southwest have a winning strategy? Explain your answers.
  3. What are the key policies, procedures, operating practices, and core values underlying Southwest’s efforts to imple- ment and execute its low-cost/no frills strategy?
  4. What are the key elements of Southwest’s culture? Is Southwest a strong-culture company? Why or why not? What problems do you foresee that Gary Kelly has in sus- taining the culture now that Herb Kelleher, the company’s spiritual leader, has departed?
  5. What grade would you give Southwest management for the job it has done in implementing and executing the com- pany’s strategy? Which of Southwest’s strategy execution approaches and operating practices do you believe have been most crucial in accounting for the success that Southwest has enjoyed in executing its strategy? Are there any policies, procedures, and operating approaches at Southwest of which you disapprove or that aren’t working well?
  6. What weaknesses or problems do you see at Southwest Airlines as of mid 2010?
  7. Does the AirTran acquisition make good strategic sense for Southwest?
  8. What strategic issues and problems must Gary Kelly and Southwest executives address as they proceed to close the deal with the AirTran acquisition and contemplate how best to integrate AirTran’s operations and AirTran’s employees into Southwest?
  9. What recommendations would you make to Gary Kelly and Southwest executives as the company heads into the next year?